It's been a sad week for Solteq Oyj (HEL:SOLTEQ), who've watched their investment drop 10% to €1.30 in the week since the company reported its full-year result. It was a workmanlike result, with revenues of €61m coming in 4.4% ahead of expectations, and statutory earnings per share of €0.15, in line with analyst appraisals. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Solteq Oyj after the latest results.
Following the recent earnings report, the consensus fromlone analyst covering Solteq Oyj expects revenues of €57.5m in 2020, implying a noticeable 5.6% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to crater 60% to €0.06 in the same period. In the lead-up to this report, analysts had been modelling revenues of €61.5m and earnings per share (EPS) of €0.13 in 2020. Analysts seem less optimistic after the recent results, reducing their sales forecasts and making a large cut to earnings per share forecasts.
Despite the cuts to forecast earnings, there was no real change to the €1.43 price target, showing that analysts don't think the changes have a meaningful impact on the stock's intrinsic value.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with the forecast 5.6% revenue decline a notable change from historical growth of 4.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 13% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Solteq Oyj to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at €1.43, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.
You can also view our analysis of Solteq Oyj's balance sheet, and whether we think Solteq Oyj is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.